What do you need to do when starting a corporation?<\/p>\n\n\n\n
There are a lot of questions when you think it\u2019s time to form a corporation. Are there tax advantages? What kind of corporation should you form? Where should you incorporate?<\/p>\n\n\n\n
These are common questions that business owners have before they start a corporation. Read on to find out the answers to these questions and how you can start your corporation.<\/p>\n\n\n\n\n\n
When you start a corporation, the first thing you\u2019ll learn is that there are several types of corporation. The main differences lie in how they\u2019re treated by the federal tax code.<\/p>\n\n\n\n
An S-Corp is an entity that passes on any profits or losses to shareholders. This is usually done by smaller businesses or sole proprietors.<\/p>\n\n\n\n
A C-Corp is taxed as its own entity, separately from the owners. Major companies that have over 100 shareholders will be a C-Corp.<\/p>\n\n\n\n
There\u2019s , which can be a single member LLC or partnership. An LLC combines the legal protections of a corporation. LLCs are typically taxed as a pass-through business.<\/p>\n\n\n\n
Which state are you going to form your corporation? Most corporations decide to form in Delaware<\/a> because there are some tax advantages and the law tends to favor businesses there. It isn\u2019t a sure thing for smaller businesses, and you may be better off registering where you do business.<\/p>\n\n\n\n Your corporation starts with your business name. You have to pick a name that isn\u2019t registered elsewhere in your state. This is usually done through the secretary of state\u2019s office.<\/p>\n\n\n\n Next, you\u2019ll need to appoint a board of directors. They are responsible for the major decisions of the corporation.<\/p>\n\n\n\n You\u2019ll then fill out paperwork and file the articles of incorporation with your state. Many states require you have a registered agent for your corporation. Be prepared to wait a bit for the states to process your paperwork<\/a>. <\/p>\n\n\n\n After that, you\u2019ll need to create the bylaws of the corporation, create a shareholder\u2019s agreement, and hold your first board of director\u2019s meeting.<\/p>\n\n\n\n One of the most important things you can do after setting up your corporation is to establish business credit. Your business credit will help you get loans and capital to start up or grow your business.<\/p>\n\n\n\n Starting relationships with vendors can be a challenge without business credit. If you need to rely on your personal credit to start with, it needs to be in good shape.<\/p>\n\n\n\nEstablish Business Credit<\/h2>\n\n\n\n